Solana (SOL) Rebounds from Recent Lows, Backed by Strong Onchain Metrics and Derivatives Data. Could SOL Rally Toward $300 and Challenge Its All-Time High?

Solana's native token, SOL has surged 8% since hitting a low of $222 on Nov. 26, following a sharp correction from its all-time high of $263.80 on Nov. 23.

Solana’s native token (SOL) has seen a surge of 8% since hitting a recent low of $222 on Nov. 26, following a sharp correction from its all-time high of $263.80 on Nov. 23. At the time of writing on Nov. 27, SOL is trading at $237.98, with onchain and derivatives data suggesting a potential continuation of the bullish trend.

A glance at the market performance shows that SOL has seen a modest gain of 1% over the past seven days. However, during the same period, the total market capitalization of major altcoins has surged by 12%. Leading tokens like Stellar (XLM), Celestia (TIA), and Uniswap (UNI) have posted gains of over 40%, outpacing SOL's performance and leaving some investors questioning the momentum.

Despite lagging the broader market, Solana’s fundamentals are strengthening and painting a bullish picture. Here are some key highlights:

Total Value Locked (TVL) in Solana DeFi has surged by 48% over the past 30 days, outpacing growth on BNB Chain (+14%) and Tron (+13%).

Major protocols driving the TVL growth include Jito liquid staking ($3.4 billion TVL, +44%), Jupiter decentralized exchange ($2.4 billion TVL, +50%), and Raydium ($2.2 billion TVL, +58%).

Solana and Ethereum are both seeing growth in different areas without direct competition. Here's how:

Ethereum is dominating the decentralized finance (DeFi) space, with Uniswap and CoW Swap seeing a 62% and 71% increase in trading volumes, respectively, over the past 30 days.

Meanwhile, Solana is leading in memecoin trading, with tokens like BONK and POPCAT driving up speculative trading volumes and catering to a different market segment.

While Solana's memecoin activity has contributed to the overall increase in activity on the network, it also introduces volatility risks. Speculative hype may not be sufficient to sustain long-term growth.

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In futures markets, the premium on SOL futures has reached an annualized 23%, the highest it has been in seven months. This indicates strong optimism in the market. However, it is worth noting that excessive bullishness, especially above 40%, could amplify liquidation risks during any price corrections.

Solana's market capitalization currently stands at $113.7 billion, which is a 73% discount compared to Ethereum's market capitalization of $429.4 billion. This valuation gap, combined with the strong onchain metrics, suggests that there could be further upside potential for SOL.